EU ETS: Green Groups Urge European Parliament to Vote for the Climate

Tomorrow, the European Parliament will vote in plenary on the amendment to the EU Emissions Trading Directive (ETS), required to adopt the so called “back-loading” proposal. The back-loading proposal has been presented by the Commission after the European Parliament called for strengthening of the EU ETS in the context of the Energy Efficiency Directive and its own-initiative report on the 2050 Low-carbon Roadmap.

In order to correct the massive imbalance between supply and demand on the carbon market, the European Commission has proposed to delay the auctioning of 900 million CO2 allowances, a step which would temporarily stall the continued oversupply.

The Parliament’s lead environment committee supported the proposal, with cross party support, in a vote on 19 February.

CAN Europe, Greenpeace and WWF welcome the proposed delay of emission allowance auctions as an important first step towards deeper reform of the EU’s carbon market. However, the number of allowances to be held back should be higher. Furthermore, backloading must be immediately followed by more long-lasting ETS structural reform.

Quotes

Quote from Joris den Blanken, Greenpeace EU

“Either parliamentarians support credible European action against climate change, or Europe will be forced back into a patchwork of national measures. It is not only the carbon market, but the entire European climate policy that is at stake in tomorrow’s vote.”

Quote from Julia Michalak, EU Climate Policy Officer, CAN Europe

"This week's backloading vote is a test for the European Parliament. MEPs will show whether they will vote for the climate or for more cheap pollution."

“The ETS is dangling on a cliff edge and Parliament can choose to lend a helping hand or to give it a shove. Support for backloading is a necessary step toward creating a carbon market that will help modernise and decarbonise Europe’s industry.”

Our campaign

Ahead of the plenary vote, last week green groups staged a live carbon “auction” in front of the European Parliament with outlandish bidders and a giant black balloon representing one tonne of CO2 emissions.

High resolution images of the event are available here. Please credit Lode Saidane/CAN Europe/WWF if reproducing the photographs.

The EU ETS is currently not functioning as envisaged. The scheme is neither contributing in a cost-effective manner to the EU’s climate objective of 80-95% emission cuts by 2050, nor accelerating the required low-carbon transition, and is therefore failing to meet its principal policy objectives.

With back-loading and ETS structural reform in place, auctioning revenues for all Member States would increase significantlybetween 2013 and 2020. With the right policy choices, these funds can mobilise investments in clean and resource-efficient technologies in the power sector and industry as a whole.

A restored carbon price signal will accelerate the modernisation of the power sector especially in central and eastern European Member States, which are obliged to invest the monetary value of the free allowances in the upgrade of their power systems.

Back-loading will not decrease Europe’s competitiveness. In addition to a 100% free allocation of allowances, industrial sectors supposedly at greater risk of ‘carbon leakage’ (the flight of carbon intensive industries to lesser regulatory regimes) - such as steel, cement and glass production - may receive state aid in compensation for increased electricity prices resulting from CO2 costs passed on by power producers. Back-loading will not decrease the surplus of allowances held by many companies.